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4 Investing Lessons From Brett Favre

We can learn many market truths from Green Bay's No. 4 as he hangs up his cleats.

The record-breaking Green Bay Packers quarterback shocked football fans by announcing his retirement yesterday. He was coming off a breakthrough season, reinvigorated by an arsenal of young skill-position players that turned the Packers into one of the strongest offensive powerhouses in the NFL this past season.

You may not know Favre. You may not follow football. However, a closer look offers some compelling investing lessons, even if you don't know your post pattern from your fly route.

1. Failing is part of succeedingFavre walks away with the all-time NFL record for touchdown passes, but he's also at the top of the board when it comes to tossing interceptions. That's the kind of thing that comes with the territory, just as Favre holds the all-time records for both attempts and completions.

If you invest long enough, losses are bound to happen. We're human. Turnovers happen, both on the field and in your portfolio. You think you have an open receiver, but a pass gets tipped at the line and winds up going back the other way.

The best quarterbacks study game film to see what went wrong. The same can be said of the best investors. They look for patterns that work. Why has operating robotics specialist Intuitive Surgical (NASDAQ:ISRG) been such a market-beater in recent years? Because it has consistently topped Wall Street's profit targets. Why has travel-deals publisher Travelzoo(NASDAQ:TZOO) been dismissed to the doghouse? Because it has missed analyst estimates in each of the past five quarters.

The key is that every miss is an opportunity to learn. Every turnover ultimately gives you a chance to get back on the field and play smarter. The key is just to get back on that field. Favre will tell you that you can't complete a pass you don't attempt.

2. It's rare to go out on topFavre's retirement surprised some fans because he was coming off a Pro Bowl season. Football players, like investors, rarely go out on top. Most quarterbacks limp away from the game as shells of who they used to be.

As a Miami Dolphins fan, I can tell you how painful it was to see Dan Marino play during the final years of his career. Few go out like Favre or John Elway, at the top of their game.

Investors can't be greedy. This doesn't mean that investors should be traders and time the market. When investors become uptick-chasing speculators, they sacrifice the biggest gains available. Winning stocks appreciate over time.

If Favre had hung up his cleats after winning the Super Bowl in 1997, he would have missed a decade of amazing record-breaking football. The key is to know when there is nothing left.

Likewise, there will always be shareholders living in denial. Yahoo!(NASDAQ:YHOO) investors believe that a higher buyout offer is coming. Starbucks(NASDAQ:SBUX) shareholders feel that scrapping breakfast sandwiches will return the company's soul. Even Apple(NASDAQ:AAPL) investors have been slammed this year, enamored by the notion that CEO Steve Jobs will always find a way to raise the bar, even as the company issues lukewarm guidance.

Hold on smartly, by knowing when to let Lambeau go.

3. Be at your best when others are notFavre's claim to fame is that he was hard to beat in cold-weather games. He won all but a handful of gridiron contests before the Cheesehead faithful at home, when the kickoff temperature was below 35 degrees. He relished the adversity, at a time when opponents would shiver under sheets of snow.

In Wall Street terms, this is what buying when there's blood in the streets is all about. When everyone else is numb -- as many are now, given freefalling share prices and sky-high short interest -- a skilled investor can make the most money.

I'm not guaranteeing that Google(NASDAQ:GOOG) has bottomed, but how often do you get a chance to buy the search-engine stud at just 18 times next year's profit estimates? The same can be said about the faster-growing Baidu.com(NASDAQ:BIDU), now fetching less than 40 times next year's earnings mark.

I hear you. It's cold outside. But ask yourself what Favre would do when everyone else was huddled by the space heater.

4. You can't win aloneWhen Favre gets inducted into the Pro Football Hall of Fame in Canton, Ohio -- and you can bet it will happen as soon as he's eligible in five years -- he is going to thank a lot of people. He'll thank his coaches for the enlightenment, his receivers for the catches, and his offensive line for the protection.

That last group is important, given that Favre set the ironman quarterback mark for consecutive starts.

Investors can't do what they do alone, either. Every Warren Buffett needs a Charlie Munger. In Fooldom, the shoulders to lean on are everywhere. Whether it's through the experience of bouncing picks off one another through Motley Fool CAPS, talking stocks in our discussion boards, or diving deep into research through one of the newsletter services, we see that investing is still a team sport, even if we're all accountable as individuals.

Author

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time with more than 20,000 bylines over those 22 years. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he splits his time living in Miami, Florida and Celebration, Florida.
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